Nasdaq closes 1.7% higher as Tesla pops, Dow adds 200 points

Expect the back-and-forth volatility to continue as markets digest mixed earnings results and weigh whether the worst of this macro storm has already come, said BTIG’s Jonathan Krinsky.

“The markets continue to play ping-pong, unable to breakdown, yet also seemingly unable to create escape velocity,” he said in a note to clients Thursday. ” We think this is largely due to the ongoing mixed macro message, as the market is struggling to decide how good and bad news should be interpreted.”

— Samantha Subin

The latest Investors Intelligence weekly survey of financial newsletter writers showed bullishness slipping back to 45.1% from 46.5% last week, which had topped the December high reading of 43.3% and the mid-August 2022 high of 45.0%.

“Bull counts in the mid-40’s are not yet suggestive of tops, especially if the overall trend is shifting positive,” II said. As stocks rebounded to start the year, bearish opinion dropped again, to 28.2% from 29.6% last week. Financial editors foreseeing a market correction climbed to 26.7% this week from 23.9% a week ago.

The so-called “bull-bear spread” was little changed at 16.2 points vs. 16.9 points previously, the 10th straight week it was positive. “[L]ofty positive spreads signal elevated risk,” II said, but current readings are far from worrisome.

Meanwhile, the latest American Association of Individual Investors sentiment survey out Thursday morning showed bullish opinion shrinking to 28.4% from 31.0% this week; bearish sentiment rising to 36.7% from 33.1%; and neutral opinion falling to 35% from 36%, but still above the historical average of 31.5% for a fourth straight week — the longest stretch since March/April 2022.

AAII noted that optimism remains below 30% (37.5% is the historical average), while pessimism is above the historical average of 31.5%.

— Scott Schnipper

Shares of struggling retailer Bed Bath & Beyond plummeted 30% after it warned for the second time that its lacks the cash to pay down debts.

The company said in a securities filing that it “does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.”

This marks the second bankruptcy warnings from Bed Bath & Beyond in a matter of weeks.

— Gabrielle Fonrouge, Samantha Subin

Stocks were higher Thursday as the final hour of trading kicked off.

The Nasdaq Composite jumped 1.3%, boosted by gains from Tesla. The Dow Jones Industrial Average traded 131 points, or 0.4%, higher, while the S&P 500 added 0.8%.

— Samantha Subin

Roku announced early in 2023 that it will build its own TVs, a decision that Needham analyst Laura Martin calls a smart one.

“Because Roku is the operating system (OS) for dozens of TV hardware makers (ie, OEMs), Roku knows which features are used most across its 70mm active accounts,” she wrote in a Jan. 26 note. “Roku can build these features into best-in-class TVs, thereby accelerating new user growth, we believe.”

It’s also likely that Roku’s TVs will be more expensive than its peers, avoiding competition and even growing its total market share, according to Needham. Roku will also still be able to benefit from its operating system, which will likely still be used by other hardware makers because of the ancillary services it provides.

Roku has some built in protection, according to Martin. If the TVs are not a hit, it still has 70 million active accounts to fall back on. If it is a success, other hardware makers such as Samsung, LG or Vizio may be forced to adopt Roku’s operating system.

Martin has a buy rating and a $65 price target on Roku, which implies nearly 25% upside from Wednesday’s close.

—Carmen Reinicke

Don’t be surprised if 2023 turns out to be another volatile year as the economy continues to show signs of resiliency, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

While this year’s market rally “shouldn’t be ignored,” several risks lie ahead if inflation continues to hover above 3%, or the Fed continues hiking rates, he said.

“Unfortunately, the Fed is likely to start talking down the market again, as early as next week, so prepare for volatility again this year; we may be in the eye of the hurricane and not completely out of the woods yet,” Zaccarelli said.

— Samantha Subin

Here are some companies making the biggest midday moves:

• Seagate Technology — Shares of the data storage company surged more than 10% a day after Seagate posted beats on the top and bottom line for its fiscal second quarter. Seagate reported earnings of 16 cents per share on revenue of $1.89 billion. Analysts called for earnings of 10 cents per share on $1.83 billion in revenue, according to Refinitiv.
• Tesla – Shares of the electric vehicle company soared more than 8% a day after Tesla posted quarterly results that were better than anticipated. The company beat analysts’ expectations on the top and bottom lines, according to Refinitiv.
• Peloton —The digital workout company added 1% after Bank of America reiterated the stock as a buy ahead of its earnings report next week. The firm said it expects modest upside on subscription and churn numbers and is hoping the company says it’s getting closer to having positive cash flows by 2024.

For more stocks making moves in midday trading, click here.

— Hakyung Kim

Bitcoin’s remains in rally mode despite pulling back the past two days and the cryptocurrency is on pace for its best month since 2020. Some investors see crypto prices as a leading indicator of investors’ risk appetite.

So far this month and year, bitcoin has risen almost 40% and is poised to post its best monthly performance since December 2020, when it gained 49.47% for the month.

Meanwhile, the S&P 500 has risen about 5% this month.

— Tanaya Macheel

Wall Street analysts are divided on Tesla after the electric car company’s latest quarterly results.

Tesla reported a beat on both earnings and revenue for the fourth quarter, and assuaged investor fears of weaker growth at the company after recently issuing a round of price cuts. While the move triggered a drop in used Tesla prices, they also supported demand for the vehicles.

“Thus far in January we’ve seen the strongest orders year to date than ever in our history. We’re currently seeing orders of almost twice the rate of production,” Musk said during a call with analysts.

For Goldman Sachs’ Mark Delaney, that was the “most important takeaway from the call.”

“Importantly, Tesla commented that since it lowered prices it has seen the strongest orders year-to-date in its history, with orders running about 2X production. While we believe this rate of orders may not be sustained in light of the weak macroeconomic environment, it would suggest the company is tracking well to our 1.8 mn delivery estimate,” Delaney wrote.

Other analysts were more negative on the stock outlook, however, saying that Tesla’s automotive gross margins, which was the lowest figure in the last five quarters, spelled trouble ahead.

AllianceBernstein’s Toni Sacconaghi reiterated an underperform rating on Tesla, saying the automaker’s latest results and earnings call had “something for bulls and bears,” adding he remains “torn” on the company. While the strong orders are promising, the analyst said the auto gross margins were too weak to overlook.

“Despite raising our energy storage forecast materially, our FY EPS declines from $3.80 to $3.54 amid lower margins. Moreover, while no one (including Tesla) knows what demand elasticity is, we believe it is uncertain whether surging demand will be sustained, particularly in China, where we believe more price cuts will likely be needed before year end,” Sacconaghi wrote.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Better times are approaching for Meta Platforms, according to Piper Sandler, even though top line concerns for the battered social media giant linger.

“META was the most hotly debated name in our recent investor marketing. Indeed, while topline concerns linger, we find ourselves more open to the idea that ’23 opex and capex come in below expectations, boosting EPS and FCF forecasts,” wrote analyst Thomas Champion in a note to clients Thursday.

History shows that Meta Platforms typically comes in below expectations and guidance, creating an upside opportunity for snares, he said.

“Based on historical performance and with the announced headcount reduction in November, it’s possible there is downside to both Street ’23 opex and capex numbers as well,” he wrote.

Given this, the firm lifted its price target on shares to $136 from $116 a share, representing modest downside from Wednesday’s close.

Champion retained the firm’s neutral rating on shares, citing pricing concerns related to its Reels product and competition.

— Samantha Subin

Sherwin-Williams shares shed more than 7% after the paint maker offered a dismal outlook for the year as the housing market faces a slowdown.

Earnings per share for the recent quarter came in ahead of expectations, but the company said it expects net sales to be flat, or fall mid-single digits this year. The company is expecting EPS of $7.95 to $8.65 for the year, behind a FactSet estimate of $10.12.

— Samantha Subin

Thursday’s GDP data adds to a broadening picture of economic growth in the fourth quarter, according to Curt Long, chief economist at the National Association of Federally-Insured Credit Unions. And that signals to him the economic outlook is improving.

“The big picture view of economic growth in the fourth quarter is a positive one. Much of that growth was concentrated in inventory build, which is unlikely to grow at a similar pace in 2023,” Long said. “Nevertheless, with resilient consumer spending, low unemployment claims, and receding inflation, some of the clouds that were forming over the economy several months ago are beginning to clear.”

— Alex Harring

William Blair downgraded its rating for Viasat shares to market perform, citing the company’s declining number of customers and increasing pressure from competitors. 

“The launch of the first ViaSat-3 satellite and subsequent entry into service may not be enough to stem subscriber losses amid pressure from SpaceX’s Starlink,” analyst Louis DiPalma wrote in a client note. “Further, Amazon is set to launch its own Kuiper-branded satellite service in the 2024/2025 time frame with aspirations to gain tens of millions of subscribers.”

Although Viasat is set to take over British rival Inmarsat—the leader of maritime broadband connectivity—pending regulatory approval, DiPalma believes the merger still presents risks. The analyst noted that Inmarsat’s maritime division posted growth of only 2% during last year’s third quarter. Other competitors such as SpaceX and OneWeb are expected to expand to the maritime industry as well, which could increase pricing pressure in the market. 

Viasat shares fell 8% after the downgrade. The stock has gained 8.4% since the start of 2023, but recorded a more than 25% decline during the past 12 months. 

— Hakyung Kim

The 19 new 52-week highs in the S&P 500 Thursday are dominated by energy and industrial companies, many of which are also trading at all-time highs. One of the 19, Caterpillar, is also in the Dow Jones Industrial Average:

• Las Vegas Sands (LVS), highest since June 2021
• Tapestry (TPR), highest since Nov. 2021
• Ulta (ULTA), all-time high back to 2007 IPO
• Wynn (WYNN), highest Sept. 2021
• Hess (HES), all-time high back to 1962 listing
• Marathon Petroleum (MPC), all-time high going back to 2011 spin from MRO
• Exxon (XOM), all-time high going back to 1920 NYSE listing
• Arch Capital (ACGL), all-time high back to 2000 Nasdaq listing
• Ameriprise Financial (AMP), all-time back to 2005 IPO
• Progressive (PGR), all-time back to 1971 IPO
• Hologic (HOLX), highest since Feb. 2021
• Incyte (INCY), highest since June 2021
• Caterpillar (CAT), all-time high back to 1929 NYSE listing
• General Electric (GE), highest since Nov. 2021
• Paccar (PCAR), all-time high going back to 1971 IPO
• TransDigm (TDG), all-time high back to 2006 IPO
• United Rentals (URI), all-time high back to 1997 IPO
• PTC (PTC), highest since July 2021
• Steel Dynamics (STLD), all-time high back to 1996 IPO

Other notable new 52-week and record highs outside the S&P 500 include:

— Scott Schnipper, Christopher Hayes

Piper Sandler began research coverage of Albemarle with an overweight rating, saying investors are underestimating the lithium miner’s earnings growth outlook. Lithium is one of five critical minerals required in electrical vehicle batteries, according to the Congressional Research Service.

“The multiple represents a substantial discount vs the historical multiple of 12.1x. We believe the discount may emanate from a mischaracterization of ALB earnings going forward,” Charles Neivert wrote Wednesday.

“Based on consensus 2024 EV/EBITDA multiple of 6.9x, the market seems to be applying a multiple more commonly associated with cyclical shares, and indicative of not only peak earnings but a significantly lower trough at some point in time. However, we see a company transitioning from a cyclical to one more associated with growth, deserving a multiple more in line with its historical performance,” Neivert added.

CNBC Pro subscribers can read the full note here.

— Sarah Min

Comcast shares gained more than 1% Thursday after earnings topped analysts’ expectations.

Comcast posted adjusted earnings of 82 cents a share on $30.55 billion in revenue. Analysts had expected EPS of 77 cents on revenues of $30.32 billion.

During the period, Comcast said it lost 26,000 total broadband customers, in part due to impacts from Hurricane Ian.

Losses from streaming service Peacock weighed on the company’s NBCUniversal business, with adjusted earnings falling more than 36% to $817 million

— Lillian Rizzo, Samantha Subin

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.

The oldest ETF celebrates its 30th anniversary this week, but the industry still has room to grow, according to a survey from State Street.

The firm, which operates the now $375 billion SPDR S&P 500 Trust ETF (SPY), found in a small survey that just 40% of U.S. investors currently hold ETFs.

One area of ETFs with significant growth ahead is fixed income, Sue Thompson, head of Americas distribution for State Street’s SPDR ETFs, said at a SPY anniversary event on Tuesday.

“I think it’s going to grow, and I’ll put a stake in the ground: It will surpass at some point the equities,” said Thompson.

“The fixed income market itself is larger than the equity market, and it is less liquid than the equity market. So the ETFs actually have more utility in the fixed income market,” she added.

— Jesse Pound

A mild winter has helped push natural gas prices down and helped futures for February notch a fresh low of 2.842, the lowest level since May 24, 2021.

So far this month, the commodity is down almost 36.5% and is on pace for the worst January performance since 2001. It’s also on pace for the worst monthly performance since March 2003.

This year, natural gas has shed nearly 36% to date.

—Carmen Reinicke, Gina Francolla

The U.S. economy expanded at an annualized pace of 2.9% in the fourth quarter, slightly outperforming a Dow Jones estimate of 2.8%. The Commerce Department’s report comes even as inflation persists and the Federal Reserve continues to raise rates.

Consumer spending rose 2.1% for the period, down slightly from 2.3% in the previous period but still positive.

— Jeff Cox

Here are some of the names making moves in the premarket:

• Tesla — The electric-vehicle maker soared nearly 8% after reporting record revenue and an earnings beat for the fourth quarter. CEO Elon Musk said the company might be able to produce 2 million cars this year.
• Las Vegas Sands — The hotel and casino operator rose about 4% despite the company reporting weaker-than-expected fourth-quarter. Wall Street analysts cited upbeat comments on the company’s earnings call about its reopening in Macao for their positive outlook on the stock.
• American Airlines — Strong holiday demand and high fares helped American Airlines’ fourth-quarter profits beat Wall Street’s expectations. The airline gained more than 1% in premarket trading.

— Michelle Fox

JPMorgan downgraded EVgo shares from neutral to overweight, citing headwinds to the company’s long-term growth. 

“We continue to like the company’s strategy with a core focus on urban/suburban charging at good site locations with notable partnerships with vehicle OEMs, rideshare and autonomous vehicle companies,” analyst Bill Peterson wrote. However, “we think its network throughput growth will likely be dampened as a result of slower site growth.”

Higher inflation and input costs, in addition to permitting delays and supply chain shortages mean that the company’s growth outlook remains tricky. 

The stock traded higher by 2.1% in the premarket despite the downgrade.

— Hakyung Kim

UBS downgraded shares of Pfizer to neutral from a buy rating as Covid-19 stabilizes and the company’s pipeline slows.

“While we see minimal downside from here, the lack of catalysts (see inside) and potential for further downside to COVID estimates drives our move to the sidelines,” wrote analyst Colin Bristow in a Thursday note.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Shares of Southwest Airlines slipped more than 2% premarket after the company posted a $220 million loss for the recent quarter as it grappled with the fallout from its year-end holiday debacle.

The airline company reported an adjusted loss of 38 cents a share on revenues of $6.17 billion. Analysts had expected a 12-cent loss per share on $6.16 billion in revenue. Southwest said the winter storm meltdown contributed to an $800 million pre-tax hit to earnings.

European markets advanced on Thursday, building on positive momentum seen in the previous trading session.

The pan-European Stoxx 600 was up 0.6% in early trade, with financial services adding 1.3% to lead gains as most sectors and major bourses entered positive territory.

Markets have been buoyed by data this week showing improved business sentiment in Germany and an uptick in eurozone services and manufacturing activity, prompting optimism that a recession in the eurozone might be avoided.

– Elliot Smith

Things are looking up for the electric vehicle industry, thanks to China’s reopening — particularly in the second half of the year, one analyst says.

Corinne Blanchard, vice president of lithium and clean tech equity research at Deutsche Bank, names one top stock pick.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Stocks in certain key sectors that are directly related to China’s reopening, such as domestic consumption and travel, have done well in recent months.

Investors looking for entry into these stocks may find them unpalatable at current valuations. But there could be another way to play the reopening, with Bank of America and UBS having identified a raft of less obvious beneficiaries outside of China.

Pro subscribers can read more here.

— Zavier Ong

As stocks continue their rally, several major financial institutions are now predicting a significant downturn in global equity markets.

The S&P 500 index has risen by more than 10% since its lows in October last year. In Europe, the STOXX 600 has increased by more than 15% over the same period.

But, according to some investment banks, those gains are now at risk as they fear the lagged effects of monetary tightening are likely to hit earnings and cause compression in profit margins this year.

CNBC Pro subscribers can read about when the market is likely to bottom and by how much here.

— Ganesh Rao

Hightower Advisors chief investment strategist and portfolio manager Stephanie Link saw positives in IBM‘s fourth quarter, which saw earnings match expectations while revenues beat estimates.

“Software up 8%, consulting up 9%, infrastructure up 7%. All three beat. The software line certainly was a very important piece because of what we got from Microsoft last night. So I think they’re taking share. Red Hat is absolutely taking share,” Link said on “Closing Bell: Overtime.” Link owns shares of IBM.

Despite the results, IBM dipped about 2% in extended trading. Link said she might add to her position.

“The stock is very cheap with a good dividend yield. So if it is cheap for whatever reason, I’m a buyer,” Link said.

The company said Wednesday it would cut 3,900 jobs, which equates to about 1.5% of its workforce.

— Jesse Pound

— Lora Kolodny, Alex Harring

Energy giant Chevron traded up 2.5% in after-hour trading after announcing a $75 billion stock buyback program and a dividend hike Wednesday night.

The buyback program will become effective on April 1, with no set expiration date, according to a press release. The dividend hike increases Chevron’s per share payout to $1.51 from $1.42. That will be distributed March 10.

Chevron’s market cap was roughly $350 billion as of Wednesday’s market close, meaning that the buyback would represent more than 20% of the company’s stock at current prices.

— Jesse Pound

These are some of the stocks making the biggest moves after hours:

• ServiceNow — The software stock tumbled 4% after ServiceNow released its latest quarterly figures. ServiceNow posted earnings per share of $2.28, beating a Refinitiv forecast of $2.02 per share. Revenue, meanwhile, matched a consensus estimate of $1.94 billion.
• Levi Strauss — The denim company jumped 7% after its earnings and revenue for the fourth quarter came in above expectations. The company also shared full-year guidance showing per-share earnings between $1.30 and $1.40 compared with StreetAccount’s $1.35 estimate.
• Las Vegas Sands — Shares of the casino operator gained more than 4% after Las Vegas Sands released its latest quarterly results. The company lost 19 cents per share on revenue of $1.12 billion. Analysts expected a loss of 9 cents per share on revenue of $1.18 billion. However, the company’s adjusted property EBITDA of $329 million beat a StreetAccount forecast of $319 million.

See the full list here.

— Alex Harring

As futures trading kicked off, the major indexes were trading slightly down but near the flatline.

Futures tied to the Dow lost 0.08%. Meanwhile, S&P 500 and Nasdaq-100 futures dipped 0.09% and 0.04%, respectively.

— Alex Harring